A The value of the world's major companies has fallen as world stock markets have plunged in recent days. The move has wiped billions of dollars off share values.

Q What are the markets worried about?

A Very low interest rates in the US have led banks to lend large sums to people with poor credit histories on the basis they could recoup losses by repossessing houses. But as interest rates have risen, so have repossessions. The US housing market has collapsed and banks are saddled with bad debts.

Q What are the wider implications?

A The premium for risky investments will widen. There has been a rush for safer investments like government bonds and safe currencies. Investors are wary of lending to private equity funds who want to buy and sell companies, so there may be less takeover activity.

Q How long will it go on for?

A No one can say. Company profits have been strong and the world economy seems to be reviving. Markets look at future expectations, so may be concerned profits have peaked.